Archive · 12 Aug 2025
Bank of America Lowers US Rates Outlook, Citing Economic Risks
Bank of America, a big bank, thinks the US government might lower interest rates in the future.
They believe this because the economy isn't doing as well as expected and because of some changes happening in the government.
The bank now predicts that the amount of money people get from US government bonds will be a little lower than previously thought.
This change is happening because of some weak job data and a person connected to a former president joining the Federal Reserve.
The bank is also betting that some market prices will go down, while traders are expecting the Federal Reserve to cut interest rates more than once before the end of the year.
Bank of America lowered its US Treasury yield forecasts due to weaker economic data.
The bank now projects 2-year Treasury yields at 3.5% and 10-year yields at 4.25% by the end of 2025.
Softer US labor market data and potential political influence are factors in the revised view.
Traders anticipate more than two Fed rate cuts by December, with an 80% probability of a cut next month.
Bank of America strategists recommend bets on falling five-year overnight index swaps.
- Who
- Bank of America strategists
- What
- Bank of America lowered its US Treasury yield forecasts.
- When
- The forecasts are for the end of 2025.
- Where
- US
- Why
- Due to weaker economic data and potential shifts in the Federal Reserve's policy.
Bank of America's Stance
Market Anticipation
US Treasury Yields
Bank of America's Stance
Suggests that the Federal Reserve may pivot to lower interest rates sooner due to economic concerns and political developments.
Market Anticipation
N/A
- 2-year yield (Dec 2025, old forecast)
- 3.75%
- 2-year yield (Dec 2025, new forecast)
- 3.50%
- 10-year yield (Dec 2025, old forecast)
- 4.50%
- 10-year yield (Dec 2025, new forecast)
- 4.25%
- Probability of rate cut by next month
- 80%